Extension of Restrictions on Statutory Demands, Winding Up and Forfeiture to 31 March 2021


Reform Proposals/Implementations Extension of Restrictions on Statutory Demands, Winding Up and Forfeiture to 31 March 2021 Dec 09, 2020 Contributor(s) Andrew J. Wilkinson Natasha Ayres On 9 December 2020 the government announced that the current temporary restrictions on statutory demands and winding-up petitions put in place under the Corporate Insolvency and Governance Act 2020 (“CIGA”), and the prohibition on commercial landlords’ right of re-entry or forfeiture for non-payment of rent under the Coronavirus Act 2020 will be extended until 31 March 2021, meaning landlords and other creditors will be prevented from exercising such rights until 1 April 2021. The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2020 will come into force on 31 December and prolong the prohibition of the presentation of winding up petitions based on statutory demands served until 31 March, and continue the current restrictions on the presentation of winding up petitions under CIGA until 31 March 2021. The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 3) Regulations 2020 will come into force on 30 December and prolong the current restriction on commercial landlords’ right of re-entry or forfeiture for non-payment of rent until 31 March, bringing these restrictions in line with the prohibitions on winding up. According to the government’s announcement today, this will be the final extension of this legislative support. The current restriction on landlords using Commercial Rent Arrears Recovery (CRAR) to recover unpaid rent pursuant to the Taking Control of Goods (Amendment) (Coronavirus) Regulations 2020 (SI 2020/1002)) will also extend until 31 March. These regulations further increased the minimum amount of net unpaid rent that must be outstanding before CRAR may take place, currently set at 276 days’ rent until 24 December, increasing to 366 days’ rent from 25 December. The above measures follow the recent reintroduction of the suspension of directors’ liability for wrongful trading, effective from 26 November until 30 April 2021 pursuant to the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020. The previous suspension of liability ended on 30 September, and although the current extension is helpful, the gap in the suspension means that directors will be at risk of potential exposure for wrongful trading liability between 1 October and 25 November 2020. Click here to view the alert in full Contributor(s) Andrew J. Wilkinson Partner London +44 20 7903 1068 andrew.wilkinson@weil.com Bio on Weil.com Natasha Ayres Professional Support Lawyer London +44 20 7903 1497 natasha.ayres@weil.com Bio on Weil.com More from the Weil European Restructuring Blog Cross-border, French Restructuring, German Restructuring, Market Trends The Weil European Distress Index Apr 11, 2024 Contributor(s) Andrew J. Wilkinson Neil Devaney Matt Benson Jenny Davidson Lois Deasey Mark Lawford Gemma Sage Anne-Sophie Noury Céline Domenget-Morin Britta Grauke Gerhardt Schmidt Court Judgments, Cross-border, News, Restructuring Weil Represents Ad Hoc Group of Supporting Creditors in McDermott Group Part 26A Restructuring Plan Sanctioned by High Court Today Feb 27, 2024 Contributor(s) Neil Devaney Matt Benson Nick Fortune Kyle McLachlan Malina Tatarova Peter Hession Cross-border, French Restructuring, German Restructuring, Market Trends The Weil European Distress Index Feb 05, 2024 Contributor(s) Neil Devaney Andrew J. Wilkinson Anne-Sophie Noury Britta Grauke Mark Lawford Lois Deasey Gemma Sage Jenny Davidson Gerhardt Schmidt Céline Domenget-Morin This website is maintained by Weil, Gotshal & Manges LLP in New York, NY © 2020 Weil, Gotshal & Manges LLP, All Rights Reserved. The contents of this website may contain attorney advertising under the laws of various states. Quotation with attribution is permitted. This publication is provided for general information purposes only and is not intended to cover every aspect of the purpose for the law. The information in this publication does not constitute the legal or other professional advice of Weil London or the authors. The views expressed in this publication reflect those of the authors and are not necessarily the views of Weil London or of its clients. These materials may contain attorney advertising. Prior results do not guarantee a similar outcome.

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On 9 December 2020 the government announced that the current temporary restrictions on statutory demands and winding-up petitions put in place under the Corporate Insolvency and Governance Act 2020 (“CIGA”), and the prohibition on commercial landlords’ right of re-entry or forfeiture for non-payment of rent under the Coronavirus Act 2020 will be extended until 31 March 2021, meaning landlords and other creditors will be prevented from exercising such rights until 1 April 2021.
The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2020 will come into force on 31 December and prolong the prohibition of the presentation of winding up petitions based on statutory demands served until 31 March, and continue the current restrictions on the presentation of winding up petitions under CIGA until 31 March 2021.
The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 3) Regulations 2020 will come into force on 30 December and prolong the current restriction on commercial landlords’ right of re-entry or forfeiture for non-payment of rent until 31 March, bringing these restrictions in line with the prohibitions on winding up. According to the government’s announcement today, this will be the final extension of this legislative support.
The current restriction on landlords using Commercial Rent Arrears Recovery (CRAR) to recover unpaid rent pursuant to the Taking Control of Goods (Amendment) (Coronavirus) Regulations 2020 (SI 2020/1002)) will also extend until 31 March. These regulations further increased the minimum amount of net unpaid rent that must be outstanding before CRAR may take place, currently set at 276 days’ rent until 24 December, increasing to 366 days’ rent from 25 December.
The above measures follow the recent reintroduction of the suspension of directors’ liability for wrongful trading, effective from 26 November until 30 April 2021 pursuant to the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020. The previous suspension of liability ended on 30 September, and although the current extension is helpful, the gap in the suspension means that directors will be at risk of potential exposure for wrongful trading liability between 1 October and 25 November 2020.

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